Figure 2: descending triangle example

As shown in figure 2, the price chart of Unionmet shows a flat support at $0.51 thereabouts. For nearly 3 months, the support gave a false sense of security to investors because while the support is holding well, every price rally is getting lower and lower. It is suggesting strong overhead selling at every rebound. Investors should be cautious of such characteristic. This is a very bearish sign as it meant that investors are very keen to sell and the selling pressure is strong as the price is unable to trade higher. In middle of Jul'07, the price broke out of the support and went on to new low. Do note that it is away from the apex of the triangle.

Last but not least, symmetrical triangle. This price pattern can breakout either to the upside or downside. Price will trade lower high as well as higher low, converging towards the apex of the triangle. It's like the buyers and sellers are very balanced in power and the price was traded in a converging manner until a breakout to either side happens.